Carpet One has been holding conventions for 32 years. These events are not only as well orchestrated and professionally staged as any Las Vegas production, they present member retailers with a host of new programs and products, educational and networking opportunities and a great deal of excitement and fun to boot. We had the opportunity to attend the 2017 Winter Carpet One Convention in Phoenix recently and saw first-hand the hard-hitting and energetic general sessions with all the hoopla as well as the accompanying trade show offering a host of services available from the co-op itself as well the products and services offered by the group’s massive number of suppliers.
At the convention, we also had a chance to sit down with Eric Demaree, president of Carpet One, for a video interview, which has been posted on TalkFloor.com. We encourage you to check it out. The following are excerpts from that interview.
TF: The theme of this convention was “Future Focus,” talk about that theme and its meaning.
Demaree: Last summer, the theme of the convention was “Focus,” and we selected three categories that we really wanted people to concentrate on, the first being our one-stop digital plan, the second, supporting the core Carpet One brands and buying through the cooperative and the third was a really heavy emphasis on training and teaching employees to be experts. As we got back and began planning for this convention, we decided to expand on that theme with the addition of the word future. The major initiative now is to demonstrate, with third-party experts and guest speakers, what members can do to attract, engage, and convert customers into life-long paying customers.
We placed a great deal of attention on our digital strategy and our platform. We have six phases that we are going through, which we described in detail during our stockholder meeting. The result is members will see a heightened presence of Carpet One online.
TF: If a retailer elects to not participate in the digital marketing offerings, if their website is not up to date and does not captivate prospects, I suspect that prospect has very little chance of walking into that retailer’s store.
Demaree: Our entire emphasis for the last year and a half has been to take the Carpet One website and transform it, which we have done. The site has all of the bells and whistles that you would expect. Here is the key however. We are offering a program called One-Stop Digital Premium, where for a monthly fee we will do it all for the members. We will provide all of the content management, all of the Facebook postings, all of the galleries and pictures and all of the articles, everything that is connected to a digital media plan. We provide this through digital content coordinators. We currently have five of them. We will probably double that number because of the popularity of the program. It’s a crucially important program. For a very modest amount, less than a Yellow Pages ad, why wouldn’t a retailer make that investment so they can spend their time taking care of their employees, their customers, and running their businesses? It’s very comforting to know that over half of our members have already taken advantage of this program.
We have a very sophisticated tool that small independents by themselves could never get, except if they had thousands to spend every month. When you consider all of the parts, pieces and tools that are provided, we are providing a world-class presence. We are tripling our investment in digital, in all types of media. In addition to pay-per-click on a national basis we can coordinate activities through our agencies so a local member is getting the most efficiency and effectiveness from their local spend. Also, we have tools that permit us to completely understand the customer, who they are, the value of their home, their demographic, exactly how to approach the customer if they are interested in only wood for example. Our systems know the customer’s preferences and, as a result, exactly how to target them and provide specific information.
TF: Talk about the competitive advantage these digital tools you just described afford Carpet One members.
Demaree: First of all, we will be above the fold on all the search engines. We have reputation management, we have geo-targeting, we know exactly who the 250 plus websites are; what is needed now is search engine optimization, and that is available through content management. We are aggressively building with teams of people so as you get above the fold and achieve greater visibility through organic search we will grab that, but we are taking measures that that permit us to do something effectively that no other organization can compete with. We have 900 plus locations, and with that, the ability to go on a national program and have secured contracts with Houzz and Angie’s List and generate a very cost effective national paid click campaign versus local. We are already getting millions of impressions and visitors every single month. Now it’s a matter of how do we get those leads and convert them? That’s the next phase that we are working on, improving the conversion rate and that translates into more sales.
TF: You mentioned that you are increasing the size of your budget in the digital marketing arena. There are numerous players out there, the big box players, the Wayfairs, the Amazons and many others that are investing considerable capital and it appears that they have floor coverings in their sites. What do you see five to 10 years down the road in this area?
Demaree: I don’t have a crystal ball, but it’s not going to get any easier. A small standalone independent will have a very difficult time competing against the sea of competitors that you just mentioned. If you look at the hundreds of millions alone that Home Depot will be spending on digital marketing, I don’t know the exact amount that will go towards flooring, but it will be significant. The good news behind that, however, is that when the big boxes start to increase their exposure for flooring, our business elevates dramatically. That’s because we are better at converting customers, we are better at making customers feel comfortable and confident that we are the experts. They may get 30 to 50% of the initial traffic, they are all coming to us as well. Our members do a very good job. Once they are in the consideration set, we compete very effectively.
TF: Looking at those major online retailers, do you see a model in the future where players like Amazon, BuildDirect, Wayfair or some other organization would be selling online and furnishing the product and the installation from a local retailer, perhaps a Carpet One member?
Demaree: One of our major suppliers is currently doing that with a big warehouse club right now, Costco. They have no inventory. The product and the installation are provided by independents. The pure play guys are going to get their share of the business, Amazon is powerful and a little scary. Wayfair doesn’t own product, they are out of Boston and we know them. I don’t think flooring is high on their priority list, but they are going to try it and quickly discover that managing the services elements of the sale is a nightmare, that’s a lesson I learned while at Home Depot.
TF: With more and more millennials joining the workforce every day with a building, universal attraction to anything digital and buying just about everything online, any of these players, Amazon, Wayfair or BuildDirect could link up with Carpet One and furnish flooring to online customers. It would be my guess that someone will eventually do this.
Demaree: Someone may look to do this, but you have to understand why we dominate the insurance, replacement and remodel business. Because we’re national in the U.S. and Canada, I think that Wayfair, Costco and Amazon are all going to play. We have to figure out a way to get in their wake because, as I said, all things being equal, if we get in the consideration set, we’re going to win.
TF: You had a very effective speaker at the general session talking about social media. In the beginning, I was very skeptical about social media’s effectiveness with a product that’s purchased as infrequently as floor coverings. Has that changed measurably?
Demaree: It has changed. We use Facebook as a way of sharing. We have digital assets like our Beautiful Design Made Simple magazine with 350 well-known designers that contribute. We’re everywhere: we’re on Pinterest, Houzz, Angie’s List, Snapchat and on Facebook. We have content, we have articles. Think about it, when a retailer becomes a member of Carpet One, they get this team of experts, and the bigger issue is that we know the business down to the market. An independent would end up paying five times more per month for what they would receive through Carpet One.
TF: Give us some insight into Carpet One’s product philosophy and how that has changed.
Demaree: When I started with this company 12 years ago, we were about 65% carpet. Today it’s more like 50%. Our hard surface business, however, was up in the double digits. We take a very systematic approach on premium, best, and better goods. Now we put the attributes that are available from manufacturers in this tiered up and tiered down selection of products so that the consumer can get it. It permits them to become emotionally attracted to the visuals and find what is aesthetically pleasing to them as far as color, style and texture, which provides a competing reason the customer to discern why one product is more expensive that another. Because we source products on a world-wide basis, we know the best places to buy. As you know, LVT and WPC are very hot, and we have done a very good job there and have expanded our hard surface footprint. We also have a world-class store interior planning design firm, we have prototype stores for four or five different sizes. The most exciting thing for me is when someone takes the leap of faith and decides to join us. We had Marty Pelosi of Farmingdale, N.J., join us a year ago. Sometime later, Marty came up and hugged me saying, “I have avoided you guys for years. This is the best thing I have ever done. You have no idea what this has done for my business.”
Editor’s note: There is more to this conversation than space permits. Check out the entire interview by visiting www.TalkFloor.com and clicking on the Floor Radio tab. We’d love to hear your feedback of this and other conversations you’ve watched or listened to on the site, as well as any people or companies you’d like to see interviewed. You can contact Dave Foster at email@example.com.